Set-Aside Applications Cannot Be Used To Reargue Merits Of The Claim

The Ontario trial court has once again emphasized that an application to set aside an arbitral award under Article 34 of the Model Law is not to be used as an opportunity to reargue the merits of the claim. Under Article 34(2)(a)(ii), where the issue before the court is whether a party could not present its case, the court's analysis will focus on whether the arbitral tribunal's conduct was "sufficiently serious to offend [Ontario's] most basic notions of morality and justice."

In Nelson v Mexico, a U.S. investor's investment treaty claim under the NAFTA was rejected by a tribunal on the basis that there was no underlying agreement that granted interconnection rights to the investor's local enterprise. As the arbitration's "seat" was in Toronto, the U.S. investor applied to the Ontario Superior Court of Justice to set aside the award. The applicant alleged that the tribunal: (a) decided the issue on a novel theory not advanced or argued by either party, which